Question:-
Wilson has a basic salary of $2,000 for the month.His income tax on the salary is $350 ans state benefit contributions amount to $180.His employers also pay state benefit contributions amount to $180.His employers also pay state benefit contributions of $210.
In June Wilson is also entitled to a bonus of $100 on which tax or deductions are payable.
How much is Wilson,s take -home pay in June ?
A)$1260
B)$1360
C)$1540
D)$1570
I believe the answer is B because both state benefit contributions of $180 and $210 should be added .But according to kaplan the answer is D.
What do you guys think ?
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Payroll Question Need Help
D is right answer .
Income tax and contribution will be deducted from salary .
2000-(350+180)=1470
Then add 100 in it because he got bonus
1470+100=1570
@syedwaleed27 said: D is right answer . Income tax and contribution will be deducted from salary . 2000-(350+180)=1470 Then add 100 in it because he got bonus 1470+100=1570No but the question is why $210 of state contribution is not subtracted ?
Yo.
Read carefully for questions of this type. The wording can get slightly tricky if you're not looking out. It says that the employERs pay state contributions of $210
Simply put, the gross pay or calculated pay PLUS any contributions by the employer dudes equates the total COST to the employers.
Gross Pay - employEE's (contributions + income tax etc) = NP/Take-Home Pay
GP - Employee's Contributions etc = NP for Employee
GP + Employer's Contributions etc = Labour Cost to Employer
Hope that answers your question.
I know this is an old thread, but I am still going to answer it, just in case somebody might have a similar question.
The question ask: " How much is Wilson's take home pay in June"?
When asked this type of question it is the same as: What is the net pay?
Net pay= Gross pay + Bonus- Income tax- State benefits contributions -other deductions
Therefore answer would be: 2000 (Basic salary)+ 100 (June Bonus)- 350 (Income tax salary)- 180 (State benefit contributions)= 1,570
(Here there are no other deductions).
Note that employer's state benefits contributions are not part of the deductions from the employee's gross pay. But, it is an expense to the employer. Hence, the answer is D($1,570) and not B ($1,360).
But Dear thefutureaccountant we say that gross pay
GROSS PAY= BASIC PAY+EMPLOYER BENIFIT CONTRIBUATION+PENSION CONTRIBUATION
NET PAY= GROSS PAY-ALLOWABLE EXPENSES/DEDUCTIONS
BUT why we didn't add the two employer contributions which r (180 and 210)!!!!
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